VZCZCXRO8306
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0484 0880208
ZNR UUUUU ZZH
P 290208Z MAR 07
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 8256
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY

UNCLAS PHNOM PENH 000484 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS, EAP/RSP--STUART ALLEN, 
EB/ESC/TFS--KATHERINE LEAHY AND LEANNE CANNON, S/CT--PATTY 
HILL AND ANNE GALER, INL/AAE--CHARLES BOULDIN 
 
E.O. 12958: N/A 
TAGS: EFIN SNAR CB
SUBJECT: CAMBODIAN RESPONSE TO CASH COURIERS DEMARCHE 
 
REF: STATE 16120 
 
¶1.  (SBU) Poleconoff presented reftel demarche to Pen Simanh, 
Director General of Customs and Excise Department, on March 
¶27.  Pen Simanh noted that in the past three years, there 
have been 16 cases of illegal cash smuggling, all discovered 
at the Phnom Penh International Airport and all destined for 
other Asian countries.  The total amount recovered in these 
cases was USD 1.2 million and Thai Baht 100,000.  Under 
Cambodian law, seized money is counted, the offender pays a 
10% fine, and the remaining money is returned to the 
offender.  Most of Cambodia's 60 border crossings are not 
used for cash smuggling, he asserted--only the land crossings 
at Poipet, Bavet and Cham Yiem and the Phnom Penh 
International Airport are entry/exit points for cash, and 
that is largely to serve gamblers.  Drug traffickers in 
Cambodia are not involved in money laundering, he said. 
 
¶2.  (SBU) Describing cash couriers and money laundering as 
"developed world concerns," he explained that his 
priority--as in other developing countries--was the smuggling 
of goods.  The Director General said that customs agents at 
both the airports and the land border crossings checked 2-5% 
of travelers for customs violations, using 28 risk indicators 
to determine which passengers should be scrutinized.  A 
government circular from October 2006 established an 
anti-money laundering and terrorist financing working group, 
but this group had done more paperwork than implementation so 
far, he noted.  The Director General said at one point that 
he had qualified staff but lacked the appropriate screening 
equipment.   Later in the conversation, however, he asked for 
the USG to fund long-term training of his staff members, 
noting that France, Japan, Australia, and Singapore had 
already provided training but the U.S. had not. 
 
¶3.  (SBU) Two members of a joint World Bank/Asia Pacific 
Group assessment team recently told Poleconoff that while 
Cambodia requires anyone bringing USD 10,000 or more in to 
the country to declare the cash in their possession on 
arrival, the system is ineffective:  data are collected but 
never verified or analyzed; and no similar requirement exists 
for taking money out of Cambodia.  When asked by Poleconoff 
about how these data are used, Pen Simanh stated that there 
is no effective mechanism for collaboration. 
 
¶4.  (SBU) COMMENT.  Like other areas of financial regulation, 
Cambodia lacks the political will and expertise to 
effectively counter illicit cash couriers (see septel). 
While the passage of an anti-money laundering law would be a 
positive step, existing laws which already require travellers 
to declare any sum above USD 10,000 that they are 
transporting provide an adequate legal platform for improved 
enforcement.  END COMMENT 
MUSSOMELI